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Freeing the adjudication genie from its 28-day decision bottle

13 January, 2005

legal matters

It is, of course, not possible to squeeze a quart into a pint pot - but is it fair to try? This question is now central to the natural justice challenges to adjudicators' decisions, particularly in the light of a clutch of cases recently decided by Technology and Construction Court (TCC) Judge Toulmin, writes Kim Franklin.

Followers of adjudication will be aware that increasingly complex and detailed cases are being referred for decision within 28 days. Upon receipt of the 20 lever-arch files, the box of drawings and CD-ROMs, the hapless adjudicator is faced with several options:

Option 1 - Resign on the spot, on the basis that it not possible to read the material in 28 days, let alone process it with a view to giving a reasoned decision.

Option 2 - Prevail upon the parties, but particularly the referring party, to extend the timetable to something more workable.

Option 3 - Get on with it.

Inevitably, each option has its downside:

l Resigning will do nothing for the fee income and Option 1 may be seen by some as 'wimping out'.

l Few adjudicators are aware that they can urge the referring party to extend time by suggesting that they are unlikely to be persuaded of the merits of the claim if they don't have time to read it. Essentially, they can say: 'Give me more time, or I will have to find against you.' With Option 2, however, once the lid is taken off the 28-day bottle, the adjudication can rapidly swell into the worst type of genie: vast, rapaciously expensive and resulting in a decision that is interim and, therefore, wholly without substance.

l Getting on with it involves working late, passing on more lucrative jobs and cancelling the next few weekends. Adjudicators - who are, in the main, imbued with the construction site ethos of tackling the problem, however demanding on the physical frame - tend simply to roll up their sleeves and go for Option 3.

Toulmin has now questioned whether this is, in fact, the correct approach. In a series of adjudication cases, culminating in CIB Properties v Birse Construction (Judgment 19.10.04), the judge considered whether it was in breach of natural justice - that is, unfair - to squeeze a complex, changing or expanding case into the confines of the 28-day process.

In AWG Construction Services v Rockingham Motor Speedway (Judgment 15.4.04), the judge found that AWG had been prejudiced by not having a proper opportunity to consider new material produced during the course of the adjudication. This was unfair and rendered the adjudicator's decision unenforceable.

In McAlpine PPS Pipeline Systems v Transco (Judgment 12.5.04), the judge wrestled with the question of whether the dispute that was argued and decided by the adjudicator raised the same issues as that originally referred. He applied a nine-question test and found that new issues had been raised in the adjudication that again made the decision unfair.

In CIB v Birse, the adjudicator had, unusually, chosen Option 2 and told the parties that he would only reach a decision if he understood the issues and was able to do justice to them. Nevertheless, Birse argued that the dispute was too complex for adjudication and that the process was inherently unfair. The judge was not assisted by the fact that the parties had engaged in what he described as 'tactical manoeuvring'.

The judge found, however, that the test for determining whether a dispute was suitable for adjudication was not whether it was too complex but whether an adjudicator could reach a fair decision within the time agreed between the parties. In this respect, the judge found that the adjudicator's approach had been 'impeccable' and that he had reached a decision within the agreed time that was impartial and fair and, therefore, enforceable.

This latest guidance from the TCC is good news for adjudicators, who can accept complex adjudications and still keep their weekend plans intact. It may not, however, be good news for dispute resolution generally, for now the lid is off and the adjudication genie is well and truly out of the bottle.

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